Columbia Sussex evicted (sorta)

Posted on April 11, 2008 by David McKee

In what has been described as an “abrupt” end to the Columbia Sussex/Park Cattle Co. lawsuit, playing out up in Douglas County, Nev., the former has paid out $40 million of an eventual $165 million and given Park Cattle the option to terminate Columbia Sussex’s Lake Tahoe Horizon Casino lease in 2011 — 29 years ahead of schedule. This is a staggering defeat for ‘ColSux,’ which had initiated the litigation and will be hard-pressed to spin this as anything but a debacle. Park Cattle also won the right to turf its Kentucky-based adversary out of the nearby MontBleu Casino Resort & Spa (formerly Caesars Tahoe) in 2018.

Given the “contumacious” nature ascribed to stubborn CEO William J. Yung III, he must have been advised that his case was going down in flames. It’s not in his nature to fold his hand so meekly. Without revealing anything specific, I can say that for Park Cattle to allow Yung to hold onto the Horizon beyond 2011 would require his company to turn over a new leaf of continental proportions, especially after Park Cattle’s court filings accused ‘ColSux’ of basically wrecking the place — both physically and financially.

Things would be a lot worse for Yung had the case gone to the jury and he’d lost, if one Park Cattle contention is correct. The landlord claims that $1.73 billion in debt related to Columbia Sussex’s Aztar Corp. buyout was attached to Wimar Tahoe, the holding company to which Park Cattle leases the Horizon. Given that Horizon-related litigation was ongoing at the time, this allegation (if accurate) suggests remarkable imprudence on Yung’s part. Had the Douglas County jurors told him, “Get out ASAP,” Yung would have really have had some ‘splainin’ to do to his debtholders, with whom his relations are already strained.

At least cooler heads prevailed in the strange saga of the Westin Casuarina and its … um … creative way of collecting a $57,000 convention bill (i.e., soak the attendees). After the wrath of Hell broke about its heads, ‘ColSux’ realized that maybe tiptoeing into your customers’ wallets — without telling them first, which would have required spending money on stationery and postage — wasn’t such a great idea and belatedly did the right thing by remitting the fifty grand or so it had run up on unsuspecting customers’ credit cards.

Give Columbia Sussex credit (if you’ll pardon the term) for realizing that its position was indefensible — ethically, at least and perhaps legally, too. You know what would have been even smarter? Not doing it in the first place! It’s a sad day when you have to congratulate someone for showing common human decency.

Turnaround at Trop? True, the Atlantic City Tropicana is coming off a horrible March, but merchants at its Quarter retail annex see signs of improvement. One tenant reports a year-over-year improvement of 40% while another sees the Trop loosening up on the comps. Now they just need to get people to gamble there, too.

Posted in Atlantic City, Columbia Sussex, The Strip | Comments Off on Columbia Sussex evicted (sorta)

Double whammy in Atlantic City

Posted on April 10, 2008 by David McKee

Casinos made a bad bet in Atlantic City. They wagered that the City Council didn’t have the resolve to ban smoking altogether (except in what promise to be hellish little cells). So they dragged their feet when it came to complying with the city’s 75/25 ratio of smoke-free/smoking-enable casino square footage.

Bad idea.

The A.C. City Council voted unanimously last night to escalate to a total ban, motivated in large part not by the merits of the issue but anger at casino intransigence. Some had taken the stance that they might as well not comply with 75/25 because they casinos would eventually be made to go 100% smoke-free … a self-fulfilling prophecy if ever I heard one. A few were complying, but not fast enough to please the city fathers.

The latter may have cut off their collective nose to spite their face, especially if smokers flee en masse to casinos in Pennsylvania and New York. This certainly isn’t the best time for Atlantic City to sustain an exodus of customers. But, faced with casinos that were essentially daring the City Council to do something about their noncompliance, local political leaders were in one of those unenviable spots where you have to choose between being disliked or being a doormat. Obviously, they didn’t opt for “doormat.”

But, for pity’s sake, who was in charge of message discipline for the casinos? “Casino officials have contended that the languid pace is common,” writes The Press of Atlantic City. Call me eccentric, but a slow-moving industry doesn’t seem like the best PR image to be putting out there. And, sure as shooting, shareholders don’t react well to the notion of languor in the executive suite. Maybe those same officials can try that “Don’t hassle us; we’re lazy” argument on newly disgruntled smokers and see how well it plays with them.

Another month, another set of unfavorable revenue comparisons for Atlantic City, -10% from last March. The good news/bad news dichotomy is a familiar refrain: Slots are down (-11%) and table games are up (-6.6%). So, for all the bad news, we are seeing a kind of forcible reinvention of Atlantic City as a table-game destination, which was probably inevitable once slot machines were no longer a novelty along the Eastern seaboard.

Mind you, we’re still talking about the fourth-highest March in Atlantic City and, measured against last year’s best-ever March, comparisons were bound to be unflattering. Unsurprisingly, Borgata leads everyone in average daily revenue, almost $250K/day ahead of Bally’s Atlantic City and raking in triple the amount won by tail-end Charlie Trump Marina.

Nobody was spared some degree of decline but Harrah’s Marina kept it below 1%, thanks to an exceptionally lucky month at the tables, +40%. Trump Plaza and Taj Mahal held their revenue shrinkage below 5%, followed by Trump Marina (one of several casinos to have good table play wiped out by lower slot win), at -6%.

Bally’s was the poster child for this, a 1% table win increase negated by an -18% drop in slot win, worst on the Boardwalk. Borgata, Resorts Atlantic City and the Tropicana got walloped on both fronts, with the latter suffering 15% and 32% lower win at tables and slots, respectively. Nobody gained ground at the slots but at least Bally’s, Caesars, Harrah’s Marina, Showboat and Trump Marina posted higher table win than last year.

Higher revenue is bad? So claims one Macao gaming executive. However it’s the managing director of a Stanley Ho affiliate, one that owns the Grand Emperor, so there may be some sour groups there, born of the fact that Melco‘s Crown Macau is drinking everybody’s milkshake at the moment.

On the other hand: looser lending standards by junketeers? That sounds like something that could easily come back to bite them (if not the casinos) in the @$$. This could be a situation worth monitoring.

Posted in Atlantic City, Boyd Gaming, Harrah's, James Packer, Macau, Stanley Ho | Comments Off on Double whammy in Atlantic City

Now it's Morgans' turn

Posted on April 10, 2008 by David McKee

Add Echelon to the list of Strip projects across whose future a shadow has fallen. No, the problem isn’t with Boyd Gaming. They’re right on track. According to this Reuters story, it’s Morgans Hotel Group‘s participation that’s not shaping up as planned:

Boyd’s Echelon, with an overall budget of $4.8 billion, is forecast to open in the third quarter of 2010, but funding has not been secured for a $950 million portion that is a joint venture with Morgans Hotel Group. “We’re working on that right now,” Boyd spokesman Rob Stillwell said on Monday. He said Boyd intends to open all of Echelon’s components at the same time, but noted there is some “flexibility” in the two hotels planned with Morgans. 

Wall Street reacted badly to Morgans’ purchase of the Hard Rock Hotel & Casino and with so much on its plate in Vegas, it still looks like the company bit off more than it could chew. That could change, of course. I didn’t think Morgans would get as far along with its Hard Rock expansion as it has. (Thanks as always to VegasTodayAndTomorrow.com for the cool imagery.)

Further down in the story, Elad CEO Miki Naftali sets an end-of-2008 target to begin site excavation for his Plaza megaresort.  Earlier this week, he’d told Haaretz the project “might have to be delayed.” I’m not sure if they consult a Magic Eight Ball to make decisions at Elad or whether the answer to the question, “Is the Plaza project on schedule?” is “Yes,” “No” or “Maybe” depending on the day of the week.

There’s hope for civilization: CBS gave the boot to Secret Talents of the Stars after one episode. Evidently viewers preferred that those hidden talents remain so. “CBS officials say news programing is expected as a temporary replacement. Hey, CBS! You’re running Dexter. So how ’bout more of the cool Showtime stuff, like The Tudors or Weeds or (my favorite) The L Word?

Let’s make a deal. Nevada solons reached a budget-crisis agreement with Gov. Jim Gibbons. And why not? The guy’s packing some serious heat. Of course, Gibber the Fibber may have fudged the truth on his license. In Nevada, that could be grounds for having said license revoked, but who wants to be the one to bring the bad news to the owner of a Glock, a 9 mm and sundry other firearms? Not me!

On the plus side, a well-armed and firearm-proficient Gibbons means that his security detail is superfluous, saving additional taxpayer $$$. Whoopee! And you sure can bet the Lege will be real cooperative now they know the Gibber is locked and loaded.

Posted in Boyd Gaming, Politics, The Strip, TV | Comments Off on Now it's Morgans' turn

Golden Gate update

Posted on April 9, 2008 by David McKee

Per a previous item about the Golden Gate‘s plan to remake itself as a boutique hotel, I wondered about the status of its Culinary Union contract. Not to worry: According to the union’s political director, Pilar Weiss, the two parties inked a new labor pact in February (boy, do I feel like Rip van Winkle), so Golden Gate co-owner Mark Brandenburg can presumably set sail beneath a cloudless sky, as far as his remake plans are concerned.

Now that the Gate, the Golden Nugget, the Four Queens and (coming soon) Binion’s are presenting shiny new faces to downtown, the pressure will be on Boyd Gaming and perennial laggard Tamares Group to provide a spiffier product. Boyd always knows what time it is but I’m not sure Tamares could even find a clock if its life depended on it, at least where casinos are concerned.

Posted in Boyd Gaming, Downtown, Labor, Tamares Group | Comments Off on Golden Gate update

Quote of the Day

Posted on April 7, 2008 by David McKee

“Corporate thinking is to squeeze every penny, paying attention only to today’s bottom line and ignoring the negative effect that impersonal and greedy service has on future revenues. But is this not the style of business that has forced the sale of the Tropicana and the virtual collapse of Columbia Sussex?” — Online Casino Advisory‘s Joshua McCarthy, weighing on the pro-comp side of the current schism in Atlantic City over whether or whether not to comp.

Posted in Atlantic City, Columbia Sussex, Marketing | Comments Off on Quote of the Day

High spirits in Evansville

Posted on April 7, 2008 by David McKee

The acquisition, by Reno's own Eldorado Resorts, of the Casino Aztar riverboat, is playing to the expected hosannas. Interestingly, while 21% of the workforce was pink-slipped by outgoing owner Columbia Sussex, that seems to be the least of players' concerns. An unscientific online poll has that coming in fifth of five priorities, far behind expanding the entertainment options available at the casino. Whatever the case, the prospective owners are accentuating the positive.

Memo to Dawn Gibbons: Don't quit your day job (fourth item).

Tax increases could be life or death to rural Nevada casinos, Bill Bible says, making a compelling argument. Which raises a fairness question: Should the privilege tax be applied at a uniform (i.e., regressive) rate to all Nevada casinos or should it be graduated to better reflect the market disparities between, say, Elko and the Strip? Whatever the case, smaller casinos are between a rock (the lobbying power of their bigger brethren) and a hard place (public support for hiking the privilege tax).

Players or profits? That's a dilemma being faced by Atlantic City casinos as they tighten up on comps. So, if you're a bused-in player and you think you're not feeling as much love as in the past, you're probably right.

Analyst Nick Danna says comp-addicted customers need to get the "just say 'no'" treatment for casinos. As he puts it, "There are certain customers that Atlantic City really shouldn't attract anymore because they're just not profitable." Translation: Retiree players have outlived their usefulness to the Boardwalk and need to make way for bright young things with disposable $$.

That's cold.

A small collection of imperfect shows: The never-ending mutation of Le Reve is chronicled. If you're like me and suspect that Franco Dragone just keeps throwing random junk at the wall until something sticks, this article will only bolster that suspicion. As the headline says,the show "reveals itself slowly." Three years of tinkering and they still haven't got it right? Yeah, you could call that "slow," I guess.

Typo of the Day: In the Las Vegas Sun, "Possible hostage situation diffused." I suppose they mean "defused." I'd sure hate to contemplate the alternative: possible hostage situations spreading throughout the Las Vegas Valley.

Posted in Atlantic City, Columbia Sussex, Indiana, Steve Wynn, Taxes, The Strip | Comments Off on High spirits in Evansville

The Westin scandal …

Posted on April 4, 2008 by David McKee

… is growing legs. No, not these kind of legs. (Well, that too.) It’s also unearthed another strange-but-true story of business as usual at Columbia Sussex. That $25/bedbug bounty at the Trop is unwontedly generous by ColSux standards — a veritable king’s ransom — even if it means the housekeeping staff is going to have do its work during the graveyard shift. (That would be interesting.)

Also, with anywhere from 12 to 22 rooms to clean, per maid per floor, how much time is the hard-worked housekeeping staff going to have to go Bug-Hunting For Dollars? (The “bring ’em in alive” proviso is the best part — and provides the company with a nifty escape clause.)

Then again … I wouldn’t oppose this bounty program being put into practice at all hotels. Could ColSux have actually had an industry-leading idea? Eureka!!!

Speaking of good ideas, repositioning the Golden Gate as a boutique hotel would qualify (although the rooms are awfully small by contemporary standards). That’s assuming the Gate has its Culinary Union contract in order. How’s that coming, by the way?

Dead man walking: The Gibber speaks. Few listen. Mismanaging an ongoing health crisis will do that to you.

Just a big coincidence. That’s what Harrah’s Entertainment is saying about the ongoing retrenchment of its overseas projects, now that it’s out of Slovenia just weeks after ditching its Baha Mar resort. Oh, and don’t forget the second thoughts Harrah’s has been having about that London Clubs acquisition. Nope, no connection to that massive new debt load. Nothing to see here. Pay no attention to the men behind the curtain.

We’re building projects that will provide as many as 100,000 new jobs, Jeremy Aguero forecasts. But he don’t have places for them to live. We’d better get working on that hadn’t we? Or what will happen?

As the affordable-housing market has shriveled over the last several, condo-addled years, I’ve long thought we’d reach this point — where the service workers who will form the backbone of this expansive, sometimes dazzling future can’t afford to live here or are simply crowded out of the housing market. It’s ultimately self-defeating.

Every time a developer bulldozes some low-cost housing to build mansions in the sky, who’s replacing those homes and apartments? And just where are Mr. Big’s maids, maintenance people, security staff expected to live? Down with the other homeless people who were found squatting at the Klondike? Guess so.

Big Bang. If you can’t get enough of implosion videos, the Press of Atlantic City has added its own to its coverage of the demolition of the old Sands garage. Warning: The ultimate collapse is obscured when some gawker steps right in front of the news camera … although karmic punishment is quickly dispensed, as his bald spot is now showcased for the entire Internet-linked world.

Posted in Atlantic City, Columbia Sussex, Downtown, Harrah's, International, Labor, Politics, The Strip, TV | Comments Off on The Westin scandal …

Headline of the Day

Posted on April 3, 2008 by David McKee

 "New Jersey to casino: Trop dead" — from AFX Financial News

Posted in Columbia Sussex | Comments Off on Headline of the Day

Hooters sagging

Posted on April 3, 2008 by David McKee

Yes, they’re drooping again at the mammary-themed hotel — revenues, that is. The recession continues to hit the bargain-niche properties first and hardest. The interesting info is buried toward the end, as potential buyer Richard Bosworth (who’s already put $3 million down, with $222 million to go) is shelling out another non-refundable half-million to keep its option alive for another month.

This is the same stalling pattern Christopher Milam fell into with the Wet ‘n Wild property. If Bosworth is having trouble scaring up the purchase price (and does the Hooters-augmented San Remo look like that tempting of a credit risk?), it doesn’t bode well for the promised $130 million redevelopment, either.

On a related note … You can set your watch by it. The annual, obligatory Passion Parties story. It must be some journalistic hazing ritual.

Fix? In? Not here! Another scofflaw gets off lightly.

An implosion! Woo-hoo! All right, so it’s only a casino garage and it’s in Atlantic City. But it looks like that Pinnacle Entertainment project is still in “on” mode, Dan Lee‘s caveats notwithstanding. There’s video, too.

Double or Nothing UNLV’s David Schwartz reviews the apologia pro vita sua of former Golden Nugget co-owner Tom Breitling. Schwartz finds a great deal to like in the book, and is very generous and sympathetic in his appraisal. I’m not scheduled to weight in on Double or Nothing until the May 5 issue of City Life, but I feel safe in saying that your book dollars are far better invested in Christina Binkley‘s Winner Takes All. Breitling’s book is a quick read, though, partly by dint of leaving out whole chunks of the story — like a not-so-successful filmmaking venture with the Fertitta brothers, which goes completely unmentioned.

How much interest will there be in Double or Nothing? Hard to say. It’s been over three years since he and Tim Poster sold the Nuggets, a timespan far longer than that of their brief ownership, and they never became major players in the industry (as opposed to the pages of Norm!). For a businessman as successful as Breitling, I’m surprised he’d get his product so tardily to market.

And now to end on a (rare, some would say) classy note …

Honoring a legend. Former Silver Slipper owner Claudine Williams receives a “Philanthropist of the Year” award tonight. Congratulations to the grande dame of the gaming industry. Long may she flourish.

Posted in Atlantic City, Charity, Downtown, Pinnacle Entertainment, The Strip | Comments Off on Hooters sagging

Monte Carlo: What the f…?

Posted on April 2, 2008 by David McKee

You know those fellows who set the Monte Carlo on fire? Well, it seems they were working under a window-washing permit. I kid you not. Tony Illia ran down this gem, which adds to the tragi-comedy of how Union Erectors turned a Strip resort into a big-ass Roman candle.

As for the non-response of the Clark County Fire Department, which declared that since the fire was unintentional no one was to be held accountable, Illia notes that this was supposed to be the new, improved Clark County and its 20-man special-investigation unit, adding "Well, it's certainly off to a bad start."

Illia, one of the best journalists with whom I've had the privilege to work, has some strong words for Clark County. Nor do the private-sector players get off the hook: "One suspects this isn’t the first time that MGM Mirage, Monte Carlo’s owner, has taken short cuts to get things done. Union Erectors has worked on other MGM Mirage properties including the MGM Grand and CityCenter. It has also done work at the Paris Las Vegas and Caesars Palace (both owned by Harrah’s) as well as The Venetian."

Speaking of fires … Arson victim the Moulin Rouge got the go-ahead from the City of Las Vegas to demolish everything save its marquee and brick tower. A new, Ed Vance-designed hotel-casino is slated to break ground next year and open in 4Q10 (which usually means, "As late in December as possible without forfeiting New Year's Eve").

Project approval and rezoning approval have already been granted for what's drawn up as a 700-room hotel, plus at least two nightclubs, four restaurants and a spa, among other amenities. It might seem small-scale by Palazzo standards, but remember that we're talking about something way off-Strip (but very close to the freeway) in a dodgy neighborhood, so it's what you might call a "marketing challenge." I'm assured that Republic Urban Properties has deep pockets (as in $4 billion deep), so it looks as though the long-promised, oft-deferred rebirth of the Moulin Rouge will finally occur.

Real Hollywood disses Planet Hollywood. Someone from the film industry strolled past Trader Vic's recently during the wee hours and was subjected to a limp rendition of "Let's Go Crazy" by Prince, played to a crowd of maybe 20 souls. The verdict? "It wasn't exactly LAX."

Posted in Downtown, MGM Mirage, Monte Carlo fire, The Strip | Comments Off on Monte Carlo: What the f…?

Columbia Sussex sinks to new low

Posted on April 2, 2008 by David McKee

Let’s say you’re Columbia Sussex, owner of the Westin Casuarina and notorious for your pinch-penny ways. What do you do if a convention organizer can’t pay up on its $50,000 tab? Why simply — and sneakily — bill it to the attendees, of course!

That’s the rude surprise that dental trainee Don Dible got when he received his bill from the Westin: an extra $665 charged to his credit card — five months after the fact. According to the AP’s Kathleen Hennessey, who has seen the offending document, ‘ColSux’ hit Dible up for “pro-rated amount per attendee.” A Houston dentist got socked for $1,027 … presumably penalized the extra $362 because he had the temerity to be a speaker at the conference, not just an attendee.

The Westin’s invoices are written so that it can pass the liabilities of companies like Coaching Center of Austin onto third parties. Besides Dible, at least 20 other complainants are reported to have surfaced — some of whom the Coaching Center says it has reimbursed.

“Columbia Sussex owns 13 casinos and 80 hotels in the United States and abroad, pulling in revenues of some $3 billion a year,” writes Hennessey. Small wonder, with tactics like these, which came as quite a surprise to the Las Vegas Convention & Visitors Authority‘s Erika Pope.

Congrats to the AP for snagging this story, stealing a march on both the Las Vegas Sun and its sleepier crosstown competitor.

More Trop trouble. The New Jersey Casino Control Commission has to decide whether to place the Atlantic City Tropicana back in the hands of ColSux affiliate Adamar of New Jersey to shelter the asset from a Delaware lawsuit. Wilmington Trust Corp. is suing ColSux for $960 million upon which it alleges the Kentucky hotelier has defaulted.

Trop trustee Justice Gary Stein finds himself in the awkward position of having to advocate that the NJCCC undo his own conservancy lest a court-ordered bankruptcy “affect my ability to sell the asset,” a process that hasn’t exactly had potential buyers beating down the door so far. My guess is that the NJCCC will feel boxed in and have to go along, but it doesn’t sound like NJCCC Chairwoman Linda Kassekert is any too happy with the situation — or with the behavior of Tropicana Casino Resorts CEO/President/Secretary/Treasurer/Sole Director William J. Yung III.

News flash: I was wrong. If ColSux goes belly-up that’s just too damn bad, says the NJCCC. Or words to that effect. Stein’s proposed solution would left him only nominally in the driver’s seat, with Yung regaining title to the A.C. Trop. The NJCCC also dealt a verbal smackdown to Stein, partly for exceeding his mandate — not to mention his employment of a car service to ferry him to and from Hackensack.

Meet the new boss, quite different from the old boss. “In 25 years I never had a layoff, and I don’t intend to start now.” With those words, Robert Dingman (above) got off on the right foot as trustee of Casino Aztar. (Dingman says he might even — Gasp! — increase staffing. That sound you hear is Bill Yung reaching for his defibrillator.)

The Evansville riverboat is entering an odd interregnum in which it will be run by the State of Indiana on Columbia Sussex’s dime (and I use “dime” advisedly) while the state vets would-owner Eldorado Resorts, whose interests include co-ownership of the Silver Legacy — an exceptionally comfortable casino-hotel, the nicest in downtown Reno, when I was hosted there … admittedly, back in the last century.

Having faced off with the Carano family during his Harrah’s Entertainment years, Dingman gives them the thumbs up as “great operators … our nemesis in Reno.”

The latter ponied up $220 million* for the gaming vessel ($5 million less than expected) on the very day Columbia Sussex was likely to be stripped of its license. Yung’s company had reneged on commitments to the city of Evansville, both in terms of employment levels and bringing in a new boat. It also ceased Aztar Corp.’s practice of supporting local charities and vendors.

Eldorado — which evidently relishes challenging riverboat markets — plunked down $169 million two years ago (plus an additional $9 million last month) for a Bossier City, La., boat and that would put Casino Aztar within its price range. Still, with credit markets being what they are, I’m awaiting disclosure of the terms of sale with bated breath.

“Our long nightmare is over,” added Dingman. Although he’s worked in some of Harrah’s most far-flung markets, from Vicksburg to New Zealand, serving in the Vietnam War will probably turn out to be Dingman’s best preparation for dealing with the scorched-earth tactics of Bill Yung. (As more than one Courier-Post reader points out, the new casino resort in French Lick has leapfrogged past Casino Aztar while Yung was busy subdividing pennies.) Apparently Yung’s can’t-fail business strategies included eradicating or severely diminishing promotional allowances.

No wonder Casino Aztar is 11th out of 11 Hoosier State casinos. (Only third-lowest in revenue, though.) In FY07, French Lick was breathing down Casino Aztar‘s neck, $111 million to $123.5 million.

This Should Be Interesting Dept. The Courier-Press adds that “Dingman has been granted broad powers to spend Columbia Sussex’s money on operating and improving the casino,” which apparently suffers from a shortage of dealers, among other things. But has he been granted broad Columbia Sussex money to spend? Yung is notoriously loath in that respect, so Dingman can probably look forward to having to play hardball with the corporate colossus of Fort Mitchell, Ky.

Bottom line: I’ve seen how the Caranos operate and I’ve seen how Bill Yung operates. Eldorado in/ColSux out is a happier ending to this story than we could have hoped for, say, two months ago.

* — The price is sometimes reported as $245 million because of a conditional $25 million Eldorado will kick in if it hits certain (undisclosed) metrics. The two companies are essentially making a wager that Eldorado can do something comparable to what it did in Bossier City, where it grew revenue 18% over a two-year period, in a declining market.

Posted in Atlantic City, Columbia Sussex, Indiana, Louisiana, LVCVA, Regulation | Comments Off on Columbia Sussex sinks to new low

Fun with Math, Columbia Sussex style

Posted on April 2, 2008 by David McKee

If you’ve noticed less blogorrhea from yours truly of late, it’s because I’m currently combing through old “Question of the Day” entries, working on a new cross-referencing system. But that doesn’t mean I haven’t found some interesting stats. For instance, look what’s happened at the Las Vegas Tropicana since current owner Columbia Sussex took over, on Jan. 3, 2007:

• On Jan. 5, the free slot-pull promotion was terminated.

• Wi-fi access has increased in price from $11.99 to $14.95.

• Prices for Titanic: The Exhibition have been hiked. LasVegasAdvisor.com lists the new admission fee as $22, but an online purchase will cost you $24.50. (Ironic Touch Dept.: Even though the Titanic exhibit will soon be moving to Luxor, the Trop’s Web site obliviously shouts, “Returning Due to Popular Demand!”

• As of the summer of 2005, the ratio of maids to rooms at Wynn Las Vegas was 1 maid for every 3.5 rooms. A conservative estimate of the same ratio at the Trop is 1 maid for every 12 rooms  (on some floors, it’s a 1-to-22 ratio).

Yup, when it comes to squeezing a penny ’til it drips blood, you can’t beat Columbia Sussex. Too bad that the “collateral damage” is that the erstwhile “Tiffany of the Strip” has been reduced to a tarnished garnet.

Posted in Columbia Sussex | Comments Off on Fun with Math, Columbia Sussex style

Understatement of the Century

Posted on April 2, 2008 by David McKee

"I understand that there's not a lot of respect for education in Southern Nevada." — David Schwartz, director of the UNLV Center for Gaming Research. For the full context, read Die Is Cast.

Crazy Bonus Stat:

53% of Las Vegas Review-Journal readers (in unscientific online poll) say Joe Torre's Los Angeles Dodgers will have a better season than Joe Girardi's New York Yankees. Well, I saw the Dodgers eke out a win last night against a wretched San Francisco Giants team comprised of rookies and players in the twilight of their careers, and it wasn't impressive. Dodger fans, you're in for a long summer, I'm afraid. (Not that my Los Angeles Angels are looking so hot right now, with the #1 and #2 starting pitchers on the shelf indefinitely.)

Posted in Baseball, Current | Comments Off on Understatement of the Century

Columbia Sussex loses one, wins another

Posted on March 31, 2008 by David McKee

Where to start? Well, Gov. Steve Beshear is about to throw in the towel on his casinos-for-Kentucky push, having decided he couldn’t get it past the House. And remember: That was supposed to be the easy part; the state Senate’s approval and popular ratification were considered to be much greater long shots.

So it’s off the table until 2010, meaning that Columbia Sussex CEO William J. Yung III, having shoveled hundreds of thousands of dollars in Beshear’s direction, has nothing to show for it but some empty buildings in Covington, Ky.

Then today, the Indiana Gaming Commission had to weigh whether to allow Yung to keep his Casino Aztar riverboat (above), in Evansville. Quoth the Courier-Press of Evansville: “By law, the Indiana Gaming Commission may not license a company that has seen one of its gambling licenses revoked in another state.” The vessel’s been on the market since December and no buyer had been identified, perhaps because — under Yung’s errant captaincy — aged Casino Aztar has become the least-visited casino in the Hoosier State and lost almost 250 employees.

IGC Executive Director Ernest Yelton, got his wish though. Just minutes ago, the Carano family’s Eldorado Resorts came to the rescue, bearing a $245 million purchase offer (possibly less, if Casino Aztar doesn’t meet certain benchmarks). Although this spares the IGC from having to actually strip Yung of his license, commission members did split the baby, after a fashion: Columbia Sussex will relinquish day-to-day operations to state-appointed trustee (and former Harrah’s exec) Robert Dingman.

This is something of an experiment for the IGC. A bill that “would have set up a procedure for operating an Indiana casino temporarily if the owner lost its license, filed for bankruptcy or abandoned a riverboat” died in this year’s Indiana Lege for mostly unrelated reasons. So the commission has to move forward into uncharted waters, reliant on a gentleman’s agreement (and power of attorney) from Columbia Sussex.

About the new owner: In addition to owning an eponymous casino in Reno, Eldorado Resorts recently was awarded full ownership of a former Hollywood Casino riverboat in the Shreveport market, which it is currently operating under the Eldorado brand.

And a Columbia Sussex that was puffing with pride a year ago, having won a runaway bidding war for Aztar Corp., now must look upon a much-shrunken version of its merged C.S./Aztar empire. It had to surrender Aztar’s Carurthersville, riverboat to Missouri regulators right out of the gate, then lost the Atlantic City Tropicana last December. Now Casino Aztar is going bye-bye, leaving only the LV Trop and a former Ramada Express in Laughlin as the only remnants of Aztar.

For the upside, what the Courier-Press‘ editorial page describes as Yung’s “short, unpleasant tenure in Evansville” is fast nearing an end.

On other fronts … The largest loan in a pool of cross-collateralized hotel loans held by Bear Stearns Commercial Mortgage Securities happens to be that of — you guessed it — Bill Yung! Here’s the techno-speak:

The Columbia Sussex Portfolio (93%), the largest loan in the pool, is collateralized by 14 full-service hotels located in 13 major urban markets with a total of 5,821 rooms. At issuance the portfolio occupancy was 76% with an average daily rate (ADR) of $131 and revenue per available room (RevPAR) of $99.6. At year end (YE) 2007 the portfolio occupancy declined to 65.2% with an ADR of $158.9 and a RevPAR of $99.4. Fitch stressed YE2007 net cash flow (NCF) also declined 6% compared to issuance NCF. The initial maturity date was October 12, 2007. The loan has three one year options to extend, and is currently in the first of the one year extensions with a maturity date of October 12, 2008 and mortgage rate of 6.3%. As a condition of the extension the loan was converted from interest only to amortizing.

A.C. Tropicana workers want a say in who their next boss turns out to be. While I sympathize, given what they’ve been through, New Jersey regulators need to tell Unite-Here Local 54 to take a step back: This is what Justice Gary Stein and, through him, the New Jersey Casino Control Commission get paid to do. After the fiasco that was ‘ColSux,’ they’re unlikely to make the same mistake twice.

Posted in Atlantic City, Columbia Sussex, Indiana, Regulation | Comments Off on Columbia Sussex loses one, wins another

Elvis has already left this building

Posted on March 27, 2008 by David McKee

Two days ago, VegasTodayandTomorrow.com broke out the specifics of FX Real Estate & Entertainment‘s Elvis-themed resort, set for the southeast corner of Harmon Avenue and the Strip, gleaned from an SEC filing. Among the principals is Paul Kanavos, previously involved in a protracted, unsuccessful courtship of Riviera Holdings.

The Las Vegas Review-Journal weighs in today, though I doubt its coverage of the project will cause a run-up in FXRE stock (especially when the ‘expert analysis’ of the project comes not from, say, Bill Lerner of Deutsche Bank, but from an Elvis impersonator).

Despite aforesaid impersonator’s unbounded Continue reading →

Posted in Architecture, Politics, Regulation, The Strip | Comments Off on Elvis has already left this building

That wacky Columbia Sussex

Posted on March 25, 2008 by David McKee

According to The Press of Atlantic City, Columbia Sussex is countersuing its bondholders, which it contends are trying to force the company into bankruptcy or seize an ownership in the Atlantic City Tropicana Casino & Resort. 'ColSux,' you will remember, is the company that is suing the New Jersey Casino Control Commission to regain control of theTropicana (which, under interim management, is finally starting to turn around the revenue landslide that occurred under Columbia Sussex's reign of error).

Even so, Columbia Sussex now complains that voluminous legal filings by Wilmington Trust are impeding the transfer of the Trop back to ColSux subsidiary Adamar ['Ramada' spelt backwards] of New Jersey, thereby "interfering with the company's right to cure a technical default." And impeding Justice Gary Stein's attempts to sell the Trop to one of a trio of potential buyers.

So let's get this straight: When it's not suing to repossess the Trop (or, more likely, collect monetary damages), Columbia Sussex is suing to facilitate the sale of the casino it claims to want back. As usual, if you can figure out what Tropicana Casino Resorts CEO/President/Secretary/Treasurer/Sole Director William J. Yung III is up to, you're a smarter person than I.

Posted in Atlantic City, Columbia Sussex, Regulation | Comments Off on That wacky Columbia Sussex

Looking for trouble

Posted on March 21, 2008 by David McKee

Seems that somebody, getting into the spirit of our increasingly Orwellian society, has been doing a few “sneak and peek” searches on the passport records Sens. Clinton and Obama. Those of you with long memories will recall that Bush I functionaries pulled this same dirty trick on a young whippersnapper by the name of Bill Clinton back in ’92. Like father, like son, eh?

OK, so at least some of the miscreants have been fired. That still doesn’t answer the question of why they did it or erase from their minds (and those of anybody with whom they were in cahoots) what was found out. Or, as the judge is always saying on Law & Order, “You can’t un-ring the bell, Mr. McCoy.”

I’m with Rep. Henry Waxman: I want to know who did this, why and what they were looking for. And if you think it’s a non-issue, well, what if it were your passport file?

[Quickie update: Seems the passport file of Sen. John McCain was breached, too. Either there are State Dept. employees with way too much time on their hands on there’s some sort of bipartisan dirty-trick activity at work. Either way, heads better be rolling. (And does this mean Condi‘s blown her shot at being McCain’s veep?)]

Meanwhile … They’re not letting this guy into the U.S.? Why, he sounds like your average Vegas high roller. Too bad he doesn’t have any “juice.”

Speaking of looking for trouble … Giant undersea spiders, jellyfish with 12-foot tentacles, starfish two feet wide — does this sound like the jumping-off point for a SciFi Original Motion Picture to you? Actually, these are the fruits of recent Antarctic research.

You know where this is gonna lead: Somebody like Tagruato Corp. is gonna start poking around and, next thing you know, we’re getting a visit from Mr. Grumpypants. Don’t make him angry. You wouldn’t like him when he’s angry.

Posted in Cloverfield monster, Election, Regulation | Comments Off on Looking for trouble

Plaza still a "go", Tropicana gets new boss, Gibbons still irrelevant

Posted on March 20, 2008 by David McKee

It's Day Five of the "Hell No, We Won't Go" crisis and Nevada State Board of Medical Examiners members Drs. Daniel McBride and Javaid Anwar continue to thumb their noses at Gov. Jim Gibbons. As does board Executive Director Tony Clark. There's little I would I like to see much more than watching a pack of dobermans chase McBride, Anwar and Clark from their offices.

Then again, it's quite a spectacle to see Nevada public officials not only recognizing that The Gibber is a paper tiger but openly daring him to do something about it. For now, we've got a Nevada governor who looks increasingly ineffectual — with 2 3/4 years to go on his term.

"Forging ahead as planned." That's the word on Elad Group's Plaza project, budgeted at $6 billion — with 6,700 units and a casino floor larger even than the MGM Grand's — slated to open in 2011. The Clark County Commission gave Elad the green light yesterday. So, anybody got $6 billion these chaps can borrow?

(For the absolute latest in Plaza designs, see VegasTodayandTomorrow.com)

Columbia Sussex Watch: The first day of Spring also means that William J. Yung III has 12 days to find a buyer and consummate the sale of Casino Aztar, in Evansville, Ind., or risk having it taken away from him when Indiana's gaming commission meets to reconsider Columbia Sussex's license, on March 31.

Meanwhile, Yung has enlisted some adult supervision (and relinquished one of his 21 corporate titles) by installing Scott Butera as president of Tropicana Entertainment. Butera has bounced around these last five years, from UBS to Trump Hotels & Casino Resorts to working for local developer Brett Torino and thence to 15 months with the runaway Cosmopolitan Resort Casino.

To say that Butera's got his work cut out for him at the remaining Trops is a considerable understatement. But he does know the casino business, which appears to be more than can be said of the crew currently calling the shots from Fort Mitchell, Kentucky.

Chips ahoy! Following a well-publicized rollout in Las Vegas, Harrah's Entertainment is taking its $25K gold chip gimmick to Caesars Atlantic City. Hey, if it's working, more power to 'em.

Man bans himself from Atlantic City casinos for life, but wants to play elsewhere, then finds he can't. What part of "self exclusion" do bozos like this fail to comprehend?

Shameless Self-Promotion Dept.: Like real estate ads, I'm inescapable in the Las Vegas media this weekend. So if you're not glutted already, you can read my takes on the new movies Look and Under the Same Moon, not to mention UNLV Opera Theatre's recent staging of Mozart's Cosi fan tutté. Oh, and did I mention last week's DVD review? I didn't? How remiss of me.

Posted in Atlantic City, Columbia Sussex, Donald Trump, Harrah's, Indiana, Marketing, Movies, Politics, Problem gambling, The Strip | Comments Off on Plaza still a "go", Tropicana gets new boss, Gibbons still irrelevant

Stalemate at The Orleans; Big Easy has big month

Posted on March 19, 2008 by David McKee

It’s been almost nine months since the majority of Boyd Gaming‘s stagehands voted to unionize. Since then, they’ve been subjected to a managerial smackdown and their elected representative, IATSE, is virtually powerless to alleviate the situation — or even to get a contract out of Boyd. IATSE has been similarly impotent with regard to Blue Man Group‘s stagehands.

Let’s face it, for all the anti-labor huffing and puffing in the pages of the Hooterville Times, er, Las Vegas Review-Journal, unions don’t have that much clout in this town, with the notable exception of the Culinary … and even it couldn’t do beans for Continue reading →

Posted in Boyd Gaming, Columbia Sussex, Election, Harrah's, Louisiana, Pinnacle Entertainment, The Strip | Comments Off on Stalemate at The Orleans; Big Easy has big month

Exodus from L.V. Trop continues

Posted on March 19, 2008 by David McKee

There will soon be even fewer reasons (not that there are many left) to visit the Las Vegas Tropicana. Instead of having to navigate a defunct escalator to see Bodies … The Exhibition or Titanic: The Artifact Exhibition, you'll be able to cross the street and see them at Luxor.

True, the moribund state of affairs at the Trop is aptly symbolized by a doomed ocean liner and a display of cadavers. Previous owner Aztar Corp. basically ignored the place and, following its reign of benign neglect, the malign neglect of Columbia Sussex seems bent on finishing the job. But visitors to Bodies ... and Titanic will now be spared the marathon trek to the far end of the Trop if they want to see these shows. (To be honest, I thought Bodies … would freak people out and be a disaster. Boy, was I ever wrong.)

Sadly, the move to Luxor means it's curtains for the Imax theater (so see those Imax movies while you still can; they're pretty damn cool). Ditto the arcade and the King Tut exhibit. In the latter instance, MGM Mirage may be accomplishing two things in one fell swoop: Bringing in a pair of revenue-generating exhibits and dispensing with what may soon become a money drain. After all, the Egyptian government has made it clear they'd like Luxor (the casino) to compensate them for displaying replicas of Luxor (the historical landmark).

This should almost complete the de-theming of Luxor. Except that it's still a pyramid. Not much that resort President (and certifiably cool guy) Felix Rappaport can do about that, short of resorting to dynamite.

Update: David Schwartz's take on this is better than mine. Yes, it's the world's first death-themed casino resort! I feel lucky already.

Posted in Columbia Sussex, MGM Mirage, The Strip | Comments Off on Exodus from L.V. Trop continues